TORONTO (miningweekly.com) – The Gahcho Kué Joint Venture (JV) – a collaboration between De Beers Canada (51%) and Mountain Province Diamonds (49%) – on Thursday passed a significant milestone on the road to developing the eponymous project in Canada’s Northwest Territories after inking an impact benefit agreement (IBA) with the Lutsel K’e Dene First Nation.

The IBA put in place a framework for De Beers, as operator, and the First Nation to work together over the life of the mine, providing participation opportunities in building and operating the mine.

"If we work together with the other First Nations, then we will be powerful. This agreement ensures that we have our families out on the land, using our land. We are shaping resource development the way we want it, according to First Nations. We are going to be monitoring it,” Chief Felix Lockhart said on Friday.

Under the IBA, the JV would respect the First Nation’s culture and provide certainty of training, employment and business opportunities for members, including “financial provisions” necessary to ensure fair participation in the project’s opportunities.

“Responsible and sustainable development is a priority for De Beers. Our relationship with Lutsel K’e is important to us and this IBA confirms our commitment to work together for the benefit of [the] First Nation members as we advance the Gahcho Kué project and build a mine,” De Beers in Canada COO Glen Koropchuk said.

Gahcho Kué will employ close to 700 people during the two years of construction and about 400 people during its operation.

PRECIOUS PROJECT

Gahcho Kué, which is Chipewyan for "a place where big rabbits are found", is located at Kennady Lake, 280 km north-east of Yellowknife and 80 km east of De Beers’ existing Snap Lake mine, in Northwest Territories. The diamond prospect is one of the largest new diamond projects under development globally.

The project consists of the Hearne North and South pipes; the 5034 West pipe, the Central and North-East pipes; the 5034 South pipe; the 5034 North pipe; Wallace; and the Dunn Sheet, Tuzo and Tesla diamondiferous kimberlite pipes, sheets and dykes.

An April revised and updated feasibility study on the Gahcho Kué project confirmed the remote project’s robust metrics.

The deposit has current National Instrument 43-101-compliant total probable reserves of 55.5-million carats, contained in 35.4-million tonnes, grading 1.57 ct/t.

The mine life has been estimated at 12 years, over which the operation will produce about 53.4-million carats at an average yearly rate of 4.45-million carats using standard drill/blast and truck/shovel equipment and pit designs, which are similar to those of other openpit diamond mines operating in the area.

The average yearly output for the first three years of full production from 2017 to 2019 will be about 5.6-million carats.

Ore will be fed to a three-million-tonne-a-year processing plant, with three stages of crushing, dense-medium separation and X-ray/grease diamond-recovery circuits.

Supporting infrastructure includes a 14.1 MW packaged diesel power plant, a 1 350 m gravel airstrip, a five-bay truck shop, an emulsion plant, a 40-million-litre fuel storage facility and a 432-bed accommodation/office complex.

According to the revised and updated feasibility study, the project will cost C$859-million to construct and the operation will require working capital of C$80-million.

Costs to ramp up the operation through to January 2017 have been estimated at C$82-million.

The start of production is targeted for 2016.